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TaxTMI 
Maximizing Value in Insolvency: NCLAT Upholds CoC's Right to Negotiate Post-Challenge Mechanism
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....HI The National Company Law Appellate Tribunal (NCLAT) recently delivered a pivotal judgment regarding the powers of the Committee of Creditors (CoC) in the corporate insolvency resolution process, particularly focusing on their authority to negotiate or revise resolution plans even after the conclusion of a challenge mechanism under Regulation 39(1A)(b) of the CIRP Regulations. This commentary p....
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....of Appellants: The NCLAT confirmed that the appellants, being part of the CoC and having substantial vote share, possessed the requisite legal standing to challenge the Adjudicating Authority's order, thus establishing the appeals as competent. * CoC's Rights for Further Negotiation: The Tribunal clarified that the CoC retains the right to negotiate with resolution applicants or to cal....
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....tion. The commercial wisdom of the CoC, as per the Tribunal, remains paramount and unchallenged. * Directive to CoC and Extension of Time: The NCLAT directed that the CoC may proceed to conduct a Revised Challenge Mechanism or engage in further negotiations with resolution applicants, as per clauses of the Request for Resolution Plan (RFRP). To facilitate this, an additional exclusion period o....
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....king business decisions, including the right to negotiate with resolution applicants post-challenge mechanism. This autonomy is pivotal for ensuring the maximization of value for the corporate debtor, aligning with the core objectives of the Insolvency and Bankruptcy Code (IBC). The judgment also highlighted the Tribunal's interpretative stance on regulatory provisions, preferring an understa....